Humana (HUM) Q1 2025 earnings summary

Executive summary

• Q1 2025 net income rose to $1.2 billion ($10.30 per diluted share), up 68% year-over-year, with Adjusted EPS of $11.58, driven by improved benefit and operating cost ratios, value creation initiatives, and CenterWell outperformance.

• Total revenues increased 8.4% year-over-year to $32.1 billion, with premiums revenue up 8.0% and services revenue up 25.6%, reflecting higher Medicare premiums and primary care growth.

• Full-year 2025 Adjusted EPS guidance reaffirmed at approximately $16.25; Insurance segment benefit ratio guidance at 90.1%-90.5%; GAAP EPS guidance revised to $14.68.

• Individual Medicare Advantage membership expected to decline by about 550,000 due to strategic exits from unprofitable plans and counties, while Medicaid and CenterWell segments show strong growth.

• Litigation regarding CMS Star Ratings and regulatory risks remain unresolved; external environment evolving as expected.

Financial highlights

• Q1 2025 Adjusted EPS was $11.58, up from $7.23 in Q1 2024; GAAP EPS was $10.30, up from $6.11.

• Consolidated revenues reached $32.1 billion, with Insurance segment income from operations (Adjusted) at $1.58 billion, up 75.3% year-over-year.

• Insurance segment benefit ratio improved to 87.4% in Q1 2025, with consolidated benefit ratio at 87.0%.

• Cash and cash equivalents increased to $4.3 billion at March 31, 2025.

• Raised $1.5 billion in debt markets in Q1 2025, covering maturities through 2026; debt to capitalization ratio at 42.8%.

Outlook and guidance

• 2025 Adjusted EPS guidance reaffirmed at ~$16.25; Insurance segment benefit ratio guidance at 90.1%-90.5%.

• Full-year Medicare Advantage membership expected to decline by ~550,000; Medicaid membership growth anticipated at 175,000-250,000.

• Second quarter earnings expected to be ~35% of full-year Adjusted earnings; Insurance segment benefit ratio expected at ~90% for Q2 2025.

• Management believes current cash, investments, and credit provide adequate resources for ongoing operations and expansion.

• Guidance anticipates regulatory impacts from the Inflation Reduction Act and CMS changes.